Forecast: Lower equipment and software investments

Investment in equipment and software is likely to grow 2.6% in 2014, below previous estimates, according to a new industry forecast.

The Equipment Leasing and Finance Foundation said its third-quarter outlook revision, down from the 4.2% growth rate the organization forecast in April, signals expectations that equipment and software investment will show “modest” growth for the rest of the year.

“The foundation’s outlook report reflects a slowing in GDP and equipment investment growth due to a weak first quarter this year that resulted in part from the extremely cold winter,” said William Sutton, the organization’s chief executive.

A potential contraction in agriculture machinery investment through the rest of 2014 as farm yields and commodity prices remain subdued.

Investment in computers “will remain muted in the short term” after strong replacement demand in recent quarters.

Software investment will be moderate in the next three to six months as companies invest in cloud technology.

The report focuses on $827 billion equipment leasing and finance industry. It forecasts U.S. equipment investment and capital spending for 2014 and evaluates the potential impact of related and external factors.